Employee benefits: no longer one-size-fits-all

Author: Sarah Byrne

A benefits scheme is a vital part of HR's recruitment and retention toolkit but employers are starting to realise that traditional off-the-shelf packages are no longer the best way to meet changing employee needs and attract new talent.

Organisations routinely offer their employees a varied selection of benefits to boost salaries. In the past benefits schemes offered a limited number of options, with little opportunity for employee input. Now the emphasis is shifting, with an increased focus on employee choice, accessibility, flexibility, fairness and wellbeing.

Employee choice

Employers are increasingly aware that employees are not all looking for the same thing from a benefits scheme and that there is no such thing as a one-size-fits-all solution. Providing more choice in the range of benefits available and enabling employees to customise a blend of options that best meets their needs is more important than ever. Glenda Chantry, HR shared services manager at veterinary charity PDSA, explains: "What one person sees as a good benefit may not be the same for another person, so making sure you have a range of benefits covering health and wellbeing, financial support, and leisure and lifestyle, is important. Employers should move away from hierarchical benefits as much as possible so that all employees feel valued and rewarded equally."

Rob Hicks, group HR director at benefits provider Reward Gateway, agrees: "It is critical to provide employees with choices related to the type of benefits they have. Every employee is unique, so this choice helps to create a benefits strategy that is as inclusive as possible."

So what are employees looking for from a benefits scheme? Tim Robertson, UK compensation and benefits lead at Microsoft, believes that "employees are looking for flexibility, peace of mind, fairness/equity and tax efficiency. I think benefits will be able to solve the first three of those by providing choice, strong 'risk' benefits (income protection, life insurance) and a consistent offering that doesn't favour one demographic over another."

Andrew Baillie, reward director at Ocado, agrees that flexibility is important: "I think employees want the same experience as that of a consumer on the high street. They want relevant products that fit their lifestyle that are affordable and that they can turn on and off when they need to."

While expanding the range of benefits offered is one step in the right direction, employees may also need help to find the best options to meet their needs. Robertson says that his organisation is seeing more demand for education or guidance to help employees decide which "products" to choose. Meanwhile, Baillie says: "I think the challenge comes from organisations having to be less paternalistic and invest more time in educating people so they can make the right choices for themselves."


In recent years employers have seen a surge in demand for benefits linked to employee wellbeing and the coronavirus (COVID-19) pandemic has accelerated this trend. In addition to demand for physical fitness solutions, there has been an increasing need for support from employers around mental health and financial wellbeing. Robertson says: "Wellbeing was previously a "nice to have", but it's now essential for various reasons: the signal sent to your employees about the firm caring about their wellbeing; the inclusion of family members into eligibility; and the economic side in order to reduce costs through medical claims/income protection."

Online wellbeing schemes are proving useful in responding to needs where meeting in person has not been possible during the pandemic. "Wellbeing and financial wellbeing are definitely top of the benefits list," says Chantry. "Our employee assistance programme is well used and provides a range of expert guidance on everyday matters and more serious issues if needed, which has been particularly useful during the pandemic. We introduced an online GP benefit in 2018 which has also been used through the pandemic."

According to Baillie, the most significant shift in employee benefits and reward schemes has been in wellbeing, with both new products coming to market and a rise in wellbeing manager roles.


The coronavirus pandemic has highlighted the key role that technology can play in promoting the benefits on offer and making them easily accessible. Online platforms that engage employees and communicate about benefits are enabling organisations to reach the increasing number of remote workers. According to Hicks, the use of technology to deliver benefits and make them more inclusive to employees will continue to grow. "Our research shows that HR leaders believe that in 2021 employees will rely on their employer to support their wellbeing more than ever before and HR teams will need to use technology to create an enhanced and streamlined employee experience."

Benefits in the future

The way in which we work has already altered significantly this year as a result of the pandemic. So how could benefits schemes change further, particularly if the workplace of the future becomes more hybrid with larger numbers of employees working from home?

Hicks says: "With a hybrid workforce you need to focus on one key aspect - flexibility. You will not be able to deliver benefits that every employee wants, but you can create a programme of benefits that allows all employees to pick what works for them. This prioritises variety, choice and personalised value for each employee. Businesses of all sizes can follow this approach as it fits into the employee life cycle, allowing them to adjust their package over time."

How might the types of benefits offered need to change to reflect employees' evolving needs? Robertson says: "I think that those [benefits] that are location-dependent, for example onsite gyms or nurseries and subsidised cafeterias, will be replaced by others that are scalable."

He also believes that the increasing cost of group risk benefits has led employers to reconsider their offering and "invest more upfront in preventative measures, including stop-loss products" and even reduce the duration of some benefits, for example offering income protection for a defined time period rather than all the way through to retirement.

Baillie agrees that some benefits that were previously enjoyed by employees have started to lose their value now that more people are working from home. "I think the scale of change could be significant once we know what the new working world will look like. The simple perk of a free gym onsite or subsidised lunch no longer has the same value to people."

Robertson concludes: "I think the real difference or unique selling point in offerings will be the intangibles like: flexibility, learning tools/tips and wellbeing, and not necessarily the more tangible, for instance whether an employee gets three or four times' base salary life insurance cover. These less tangible elements will entice the heart versus the head, especially those that support the employee and their family/dependants."